Traditional institutions have generally not been able to take advantage of any of the incredible gains in crypto over 2023. However, those who added Coinbase and Microstrategy to their portfolios would have done pretty well.
The focus at the end of 2023 is the impending announcement of whether the very first US-based Spot Bitcoin ETF will be granted. Many institutional investors are no doubt considering a purchase into one of these potential funds.
However, for the institution or business that up to now has desired to gain exposure to crypto, there has actually been a way to do so, and this has been through the purchase of stock in either Coinbase or Microstrategy, or perhaps both.
Coinbase for crypto and bitcoin
Coinbase would have initially been the way to get exposure to the more varied world of cryptocurrencies. Although, as the year has progressed, and various of the Spot Bitcoin ETF applicants cited Coinbase as their crypto custodian, Coinbase has become more of an institutional proxy for bitcoin.
Microstrategy pure bitcoin play
That being said, Microstrategy may be more the pure bitcoin play for the institutions. With Michael Saylor at the helm of Microstrategy as CEO, and more recently becoming its chairman, everything has been directed towards the company owning more and more bitcoin.
Saylor himself has said that buying Microstrategy is a leverage play on bitcoin. And when one looks at the performance of Microstrategy compared to bitcoin, this statement is found to be true.
Big gains for $COIN and $MSTR
Source: Trading View
Year to date, Microstrategy stock has risen 338%, while the asset bitcoin has climbed 166% over the same period. So for 2023, Microstrategy (MSTR) has more than doubled in value compared to the king of the cryptocurrencies.
Source: Trading View
If one looks at Coinbase stock (COIN), the picture is even more telling, with $COIN rising 415% over the same period. Perhaps the fact that Coinbase is also a major play for many cryptocurrencies and not just bitcoin makes it an even more enticing prospect.
Regulatory picture still unclear
With the regulatory picture for crypto very much still unclear, especially in the United States, and with a lot of regulation looking to squash and stifle the innovative crypto sector, there is still a long way to go for crypto, although for bitcoin things are starting to look slightly more rosy as institutions look to the potential of a spot ETF.
Expect both Microstrategy and Coinbase to play very big parts as the expanding crypto landscape unfolds.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
